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SECURITISATION VEHICLES AT LUXEMBOURG

Asset securitisation is a mechanism for converting illiquid assets into liquid, marketable assets. We may define this process as funding whereby an entity transfers illiquid assets or exposures to a dedicated securitisation vehicle (SV) in exchange for a corresponding amount of cash. The VT is financed by the issue of securities. Returns will depend on the income generated by the securitized assets. Since the Securitisation Act of 22 March 2004 as amended, the country has considerably strengthened its economic competitiveness in this area with the creation of a legal, regulatory and fiscal framework that is among the most favourable in Europe.